Electricity Increase Could Affect GDP-T&T

• The new president of the Trinidad and Tobago Manufacturers' Association (TTMA) Roger Roach believes a proposed electricity rate increase could lead to economic fallout and a potential decline in Gross Domestic Product (GDP).
• The Regulated Industries Commission (RIC) proposed rate increases for the Trinidad and Tobago Electricity Commission (T&TEC) late last year, which included the widening of tiers of consumption with the introduction of a fourth tier for 1,400 kWh and higher usage.
• The proposed new rates would see increases for residential customers ranging from 15%-64%, and hikes of 51%-63%for commercial customers, and are intended to deal with demand management.
• The TTMA commissioned an international accounting firm to conduct an impact analysis of the proposed rate hike on manufacturers. They argued that the increase proposed to commercial and industrial customers would have far-reaching consequences given that 100% of costs would be passed down the value chain, and consumers could potentially face a 15% increase in their grocery bills.
• The data also indicated that the rate hike could lead to a potential decline in GDP of 0.66%, a potential decrease in non-petroleum exports of 1.63%, and a potential increase in core inflation of 1.16%.
• Calls are therefore being made to the government to find other workable solutions to the value-added-tax (VAT) refund problem and the group expressed that what is required is a “meeting of the minds” in order to devise a practical solution going forward.

(Source: CariCris